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IRAQ: It's the oil, stupid!

The devil lurking in the details of the 96-page Iraq Study Group report has mostly escaped notice in the United States. Page 84 of the report by a 12-member panel headed by former Secretary of State James Baker and former Congressman Lee Hamilton includes a recommendation that the Iraq National Oil Co. be privatized.

Surprise! Surprise!

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20,000 or 30,000 more troops should be able to handle the specific misson of securing and militarizing Iraq’s oil fields.

“The United States should assist Iraqi leaders to `sic` reorganize the national oil industry as a commercial enterprise, in order to enhance efficiency, transparency and accountability.”

Assisting in the takeover will be the World Bank and the International Monetary Fund, set to impose Western business and accounting practices on Iraq’s energy ministry, which Western oil executives believe is too corrupt and inefficient to operate properly.

Privatization is supposed to attract major petroleum companies such as British Petroleum, Shell, and ExxonMobil to help Iraq oversee and market the third-largest petroleum reserves on earth (more than five times the reserves of the United States).

More revealing, the United States spent all summer lobbying and otherwise persuading Iraqi lawmakers they should repeal the ban that prohibits foreign investment in Iraq’s petroleum industry. The industry was nationalized in 1972. Word is the amended law may be submitted and passed by March. This plan directly contradicts repeated U.S. statements about its lofty intentions in Iraq, including promises that the country’s resources belong to the Iraqi people. That statement, from former Secretary of State Colin Powell, was key in passing a UN Security Council resolution allowing the United States to lead a 34-nation coalition in the 2003 invasion dubbed Operation Iraqi Freedom.

But the strategy printed in the Baker-Hamilton report and the lobbying of Iraqi lawmakers haven’t escaped attention in Europe. On January 7, The Independent, a flagship of the global media conglomerate headquartered in Dublin, Ireland, jumped into the fray. After obtaining a copy of the revised oil law, The Independent fired a salvo entitled “The Spoils of War: How the West will make a killing on Iraqi oil riches.” The story said Iraq’s massive oil reserves are about to face large-scale exploitation by Western oil companies.

Dow Jones and The Independent both said the new law taking shape in Iraq would allow 60 percent of the nation’s petroleum industry to partner with foreign firms. Under 30-year contracts to extract the crude, Western companies could claim up to three-quarters of the profits in the early years of joint operations.

Industry analysts say changing the law intended to protect Iraq’s largest resource (90 percent of the country’s economy) is the only way to get Iraq’s oil industry back on its feet, The Independent reported.

The new law is expected to be sponsored by Kurdish delegates from oil-rich northern Iraq. (Ah, yes, as if there isn’t enough resource-competition and sectarian violence in Iraq.) International organizations, including the London-based think-tank Platform, oppose the new law. A large Iraq union federation and others are outraged by the proposal and its favorable terms that have the big foreign oil companies eager to move in.

Is this really a surprise? The Bush administration already looks like a branch of the American Petroleum Institute with Vice President Dick Cheney as the biggest oil slick. He headed Halliburton, the international oil-equipment-supply-and- service conglomerate with 300 subsidiaries and partners worldwide. His stock is in trust while he’s vice president, so it was just a coincidence Halliburton and subsidiaries such as Kellogg Brown and Root were given billions in non-bid contracts to supply the U.S. military and coordinate rebuilding in Iraq.

This war isn’t about making Iraq a model democracy in the Mid East. It’s all about the oil. It always has been. And 20,000 or 30,000 more troops should be able to handle the specific mission of securing or militarizing Iraq’s oil fields.